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TMI Blog2019 (9) TMI 552X X X X Extracts X X X X X X X X Extracts X X X X ..... t the agricultural land is rural land was raised for the first time before us. In the absence of any findings of the lower authorities on factual aspects, we decline to entertain the aforesaid new plea. We also find no merit in the plea of the assessee for its inapplicability of Section 56(2)(vii)(b)(ii) to the FY 2013-14 concerning AY 2014-15. The aforesaid provision is applicable from AY 2014-15 and would thus apply to transactions concerning FY 2013-14 as intended by the legislature. The assessee has taken an altogether new plea that agricultural land bearing Block No. 143 was purchased in the subsequent financial year, which plea was not taken before the lower authorities. We thus see no reason to entertain such plea in the absence of any supporting material placed before the lower authorities. Otherwise also, in view of the provisions of Section 150(1) r.w.s. 153(6) of the Act, the differential income can be assessed in AY 2014-15 and therefore the whole exercise will be revenue neutral. We, however, do not seek to delineate. We thus find no merit in any of the grounds set up by the assessee. - I.T.A. No. 2849/Ahd/2017 - - - Dated:- 11-9-2019 - Shri Rajpal Yadav, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A). 5. The assessee contended before the CIT(A) that in view of provisions of Section 49(4) r.w.s. 54B of the Act, the addition towards understatement of income under s.56(2)(vii)(b) of the Act is not sustainable in law. The CIT(A) however did not see any merit in the plea raised on behalf of the assessee and dismissed the first appeal. The CIT(A) dismissed the appeal of the assessee with the observations that amount of addition of ₹ 9,50,946/- under s. 56(2)(vii)(b) may be available in future under s.49(4) of the Act as and when the capital gain arises on transfer of land under purchase. The relevant operative para of the order of the CIT(A) is reproduced hereunder for ready reference: 3. Conclusion:- The submission made by the assessee has been carefully considered. However, the same is not found acceptable. As per provision of section 56(2) of the IT Act, the following income shall be chargeable to income tax under the head income from other course, namely................ (viib) Any immovable property:- (i) Without consideration, the stamp duty value of which exceeds fifty thou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ever challenged above facts and the stand taken by the appellant in its entire body of the assessment order. The assessee further submits that it is clear from the law that by inserting deeming fiction of Section 49(4), the value of addition to be made by assessing officer under section 56(2)(vii) shall be deemed to be the value which needs to be taken into account along with cost of purchase for the purpose of calculation of capital gain and the cost of new asset shall be increased to the extent of addition so made by the assessing officer. V The appellant submits that there is direct nexus between section 49(4) of the Act cost of asset and cost of asset which is required (o be considered while claiming exemption under section 54B of the Income Tax Act. 1961 and therefore the appellant request that the corresponding amount of addition so made by the assessing officer may please be allowed and cost of capital asset should be increased while computing capital gain, quoting judgment of Hon'ble Supreme Court of India in the case of M/s. Goetz (India) Limited vs. CIT 284 ITR 223 as there is no relation of amendment in Income Tax Return but to give the effect of d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant herewith make additional written submission on legal aspects as required by your honor. The arguments made under different propositions were already made under previous written submissions. The appellant herewith provide comparative statement of total income and attached original revised computation of total income for ready reference of your honor. b. Submission of Comparative Statement of Income as required by your honor: The Appellant had argued in their previous written submission that the addition under section 56(2)(vii) would have direct linkage with cost of asset and therefore the exemption claim under section 54B of the Income Tax Act, 1961 against land sold would be increased to that extent as per section 49(4) read with section 54B of the Income Tax Act, 1961. The appellant would like to provide computation of total income after having effect of addition under section 56(2) and enhanced exemption by virtue of section 49(4) for ready reference of your honor. The appellant herewith reproduced comparative statement of computation of total income after incorporating effect as mentioned above. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (4989) (4989) Less. U/s 80TTA (10000) (10000) Net Taxable Income NIL 897773 Agriculture Income 595760 595760 Add. Income Chargeable For Special Rates 2029270 1078324 Total Income 2625030 2571860 Computation Of Tax Payable Tax Income Chargeable For Normal Rates Nil 278056 Net Income Char ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It states that where the capital gain arises from the transfer of a property, the value of which has been subject to income tax under clause (vii) or clause (vita) of sub section (2) of section 56, the cost of acquisition of such property shall be deemed to be the value which has been taken into account for the purposes of the said clause (vii) or clause (vita). It means that in case the buyer of the property has acquired the property as capital asset, the legislature has prescribed the provision for cost step-up available to the buyer/transferee for the purpose of calculating capital gain at a later date when such property is sold / transferred by such person. Provision, such as sub-section (4) to section 49 would mean that cost step-up shall be available to the person only for the purpose of calculating capital gain when such property is transferred at a later date as capital asset. In view of the above, deduction on the enhanced value will not be available for the deduction under 54B of the Act in the year under appeal. The ground of the appellant is dismissed. 6. Further aggrieved, the assessee preferred appeal before the Tribunal. 7. Before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The CIT(A) has upheld the aforesaid action of the AO. We do not see any infirmity in the order of the CIT(A) in this regard. Section 49(4) of the Act clearly provides that the benefit of the inflated cost of acquisition in view of the deeming provisions under s. 56(2)(vii)(b)(ii) of the Act would be available at the time of sale of the asset and capital gains will be accordingly reduced to the extent of such increase in deemed consideration. The CIT(A) has given appropriate relief in this regard. We thus see no wrong in action of the CIT(A). The plea of the assessee that the agricultural land is rural land was raised for the first time before us. In the absence of any findings of the lower authorities on factual aspects, we decline to entertain the aforesaid new plea. We also find no merit in the plea of the assessee for its inapplicability of Section 56(2)(vii)(b)(ii) of the Act to the FY 2013-14 concerning AY 2014-15. The aforesaid provision is applicable from AY 2014-15 and would thus apply to transactions concerning FY 2013-14 as intended by the legislature. 11. As noted earlier, the assessee has taken an altogether new plea that agricultural ..... X X X X Extracts X X X X X X X X Extracts X X X X
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